Sustaining the Third Offset Strategy in the Next Administration

After more than a year of speeches, debate, and discussion (much of it curated here at War on the Rocks), the recent fiscal year 2017 (FY17) budget submission finally provides facts with which to evaluate the Pentagon’s so-called third offset strategy. After examining the portfolio of investments and initiatives identified by the Department of Defense, we think the Pentagon is off to an excellent start. Looking forward, we hope that progress is sustained well into the next administration — Republican or Democrat. Whether or not this strategy is continued by the administration will govern whether the third offset strategy will succeed or fizzle out.

Discussions about the third offset strategy have been complicated by the range of messages that have come out of the Pentagon since the initiative was first announced by then-Secretary Hagel in November 2014. Descriptions have run the gamut from the need for game-changing technologies, to the challenge posed by anti-access and area-denial (A2/AD) technologies and strategies, to the need for autonomous systems and human–machine teaming, to the broader need for innovation. Other related efforts such as Secretary Carter’s structured outreach to Silicon Valley and the launch of several defense innovation initiatives like the Defense Innovation Unit-Experimental (DIUx) have further muddied the waters. With no “third offset” line item in the 2017 budget submission and a simplistic tendency to lump every high-tech capability into this bucket, legitimate questions have been raised about how to truly evaluate the effort.

So it is worth being very clear what we mean by the phrase “third offset strategy” and what problem we believe it is designed to solve. We believe the third offset strategy is designed to help ensure that U.S. military forces can successfully operate in a world of ubiquitous precision munitions. This should be the central challenge animating U.S. force planners and strategists over the next several decades. The next secretary of defense should therefore arrive with a thorough understanding of this challenge, a sense of the progress already made in addressing it, an openness to accept the hard work of his or her predecessors, and the diligence to make sure winning “bets” are sustained in upcoming defense budgets.

The question of how to operate in a world of ubiquitous precision munitions is a very hard problem, and its level of difficulty is akin to the two prior offset strategies that DOD officials consistently reference. The first was the question of how the U.S. military could possibly prevail against the Soviet Union in the early years of the Cold War, when the Red Army massively outnumbered Western forces arrayed in Europe. The Pentagon’s answer was to establish dominance in nuclear weapons. The second Cold War problem was the matter of how to deter and prevail over Soviet conventional forces once they had significantly eroded the U.S. edge in nuclear weapons in the early 1970s, to the point where their conventional deterrent value came into question. The answer, largely developed by then-Under Secretary for Research and Engineering William J. Perry, was to establish a dominant qualitative edge in a totally new warfighting approach: precision munitions, their means of delivery (e.g. cruise missiles and stealth aircraft), and sophisticated “battle networks” that could give commanders much greater battlefield awareness and freedom of action.

In both these eras, the United States quite effectively (if temporarily) obviated or “offset” the Soviet Union’s core military advantage, its ability to employ massive numbers of conventional forces. Nuclear weapons were a qualitative response to the Soviet Union’s quantitative advantage. And guided munitions or “smart weapons” were likewise a qualitative response to a quantitative challenge. But more simply, both the first and second offset strategies are excellent examples of good defense strategy, personally initiated and overseen by defense senior leaders.

So why is a world of ubiquitous precision munitions so challenging that we need to craft an overarching defense investment strategy to respond? Simply put, today’s defense planners must assume that any plausible adversary (state or non-state) could employ guided munitions against U.S. forces. That is a massive shift in what planners call the “operating environment” and a huge potential shift in the global balance of military power. The same technologies that were central pillars of America’s military dominance are now also central to the defense strategies and plans of our adversaries.

There are two reasons the ubiquity of precision weapons is so problematic. First, adversaries that can employ precision munitions are essentially breaking into a warfighting regime whereby the accuracy of their weapons is largely independent of distance. In other words, they are increasingly able to unleash devastating firepower at great distances with pinpoint accuracy, a capability that had been the exclusive domain of the United States for decades. This is why defense planners are so concerned about the proliferation of long-range guided missiles that can easily (and accurately) reach U.S. land bases in the Pacific and elsewhere, and possibly U.S. Navy large surface vessels as well. This dynamic is forcing us to rethink concepts of operations whereby U.S. air and naval forces are forward-stationed relatively close to an adversary, a posture we could employ with modest risk in recent decades. That kind of operational sanctuary is going to be in very short supply in the future. U.S. ground forces are also starting to face plausible adversaries that could make closing with and engaging adversary ground forces much more difficult. The kinds of guided rockets, artillery, missiles, and mortars seen in recent conflicts and at disturbing degrees of scale in places likes Eastern Ukraine portend much more difficult ground combat scenarios for which we aren’t adequately postured. When Deputy Secretary Work stated at last November’s Reagan Defense Forum that “10 years from now if the first person through a breach isn’t a frickin’ robot, shame on us,” he was conveying his belief that we need to invest more in our ground forces to make them more lethal and survivable in a battlefield filled with precision munitions on all sides.

The second reason ubiquitous precision munitions are so vexing is that it strikes at a core defense strategy proposition: that the quality of our forces can obviate or offset any numerical advantages an adversary may have. The current defense strategy assumes a brigade of U.S. infantry soldiers or an air wing of U.S. fighter aircraft can outmatch their opponents even if they are outnumbered owing to their competence, creativity, and technology. While we believe the nature of the all-volunteer force will provide lasting advantages, the proliferation of precision munitions and their means of use and delivery is rapidly eroding that important technical edge. If this trend is allowed to continue, an adversary could achieve temporary or lasting parity in both the qualitative and quantitative dimensions of warfare — a very dangerous position for U.S. military forces.

Based on these judgments, we believe the third offset strategy investments highlighted both in the FY17 budget submission and the overarching framework offered by Secretary Carter and Deputy Secretary Work represent real progress in evolving the joint force toward one that can operate in a world of ubiquitous precision munitions and prevail against adversaries that can employ them in all warfighting domains.

For instance, if adversary precision munitions bring a degree of qualitative parity to certain potential warfighting competitions, one would expect the Pentagon to prioritize ways to create quantitative advantages that can help compensate. We see this in the FY17 budget in numerous ways. First, the budget allocates nearly $500 million to increase the U.S. stockpile of precision munitions. Second, the Pentagon is evolving current precision munitions, such as the SM-6 anti-air missile, to add an anti-ship capability. Combined with new Tomahawk missile upgrades that also add an anti-ship capability, the U.S. Navy’s magazine of long-range guided anti-ship missiles will increase dramatically. Third, the budget prioritizes the Virginia Payload Module, a so-called “extended cab” version of the Virginia class submarine that increases the vertical launch tubes on each sub from 12 to 40. Fourth, we see concepts being considered such as a so-called “arsenal plane” that could deploy a swarm of hundreds of small drones, confusing an adversary’s sensor grids, overwhelming defenses, or even attacking targets. Simply put, a key component of the third offset strategy must be to find ways for U.S. forces to generate more mass or quantity. The focus on the quantitative side of the warfighting equation in these investments portends a very different approach to the status quo in U.S. warfighting strategy and doctrine, and we think this is strong evidence that the third offset strategy is taking hold inside the Pentagon.

Further, as adversaries invest in longer-range ballistic and cruise missiles that require U.S. forces to project power from farther away in some scenarios, maximizing the range of our aircraft is a logical response. And we see that in the decision to require the Navy to develop an unmanned carrier-based aerial tanker aircraft. At present, the parameters of the new Stingray carrier tanker drone remain somewhat unclear, such as whether or not the aircraft will be designed to eventually evolve into a stealthy-strike platform (hint, it absolutely should be). But extending the organic range of the carrier air wing is a vital means by which to keep the crown jewel of U.S. power projection — the aircraft carrier — the platform of choice. We see the strong hands of Carter and Work in the decision to transition from the contentious surveillance/light-strike carrier drone to a mission tanker that can hopefully evolve into a strike platform as well.

Similarly, if precision munitions are making land bases and large surface vessels more vulnerable, one would expect the Pentagon to make substantial investments in undersea platforms of all types. We see exactly this in the FY17 budget submission, both for the Ohio-class Replacement Program, the Virginia Payload Module mentioned above, and a move toward building numerous types of unmanned underwater vehicles (UUVs). UUVs are potential game-changers as they offer the possibility of U.S. forces being able to infiltrate large numbers of submersible drones for a variety of warfighting missions. Imagine a scenario whereby U.S. manned surface vessels or submarines launch hundreds of unmanned submersibles that could infiltrate well inside an adversary’s A2/AD zone and rest on the ocean floor near adversary ports or key sea lanes. The deterrence and warfighting possibilities are numerous, to say the least.

What we don’t see, at least not yet, is the offset strategy effort translating directly into comparable seed-corn investments for U.S. ground forces. There are very interesting capabilities being tested, to include DARPA’s EXACTO, a guided 50-calibre bullet, and small guided munitions like Raytheon’s PIKE guided missile capable of being launched from a soldier or marine’s grenade launcher (See our colleague Paul Scharre’s recent report on challenges for ground forces). But we aren’t yet detecting major attention from senior defense policymakers to this aspect of the defense investment portfolio. We expect that the FY18 budget development cycle will include more overt focus on these emerging challenges.

We can say now with confidence that the long-heralded “third offset strategy” is real. Whether it lasts well into the next administration however, is a different issue. Work acknowledges that more thinking needs to be done before “firm bets” are made in a range of advanced capabilities. Therefore, the small bets approach of “prepar[ing] as many demonstrations on advanced capabilities as we possibly can for the next administration to determine … the way they want to go” is good leadership, but politically and bureaucratically risky. With so many competing priorities, many components in the building will not be inclined to lobby for sustainment and scaling of offset strategy efforts in the FY18 budget next spring, and the next administration may not be inclined to embrace the hard work currently underway. The next team will have to address serious capacity, capability, and readiness tradeoffs and a significant so-called procurement bow wave that is approaching that will continue to force hard choices.

Carter and Work deserve much credit for seeding the ground with plenty of smart investments and providing long-desired top cover for re-energizing a productive competition of ideas. But it will be up to the next secretary and his or her team to ensure that this newly fertile ground can continue to produce new capabilities and ideas that will drive the development of tomorrow’s U.S. military. The transition period between this administration and the next will be a period of maximum vulnerability for the third offset strategy — as there are already powerful institutional antibodies that see it as a threat to the status quo.

But make no mistake, the third offset strategy is here. To those inside and outside the Pentagon that have labored to make it real — take a bow, and get back to work.

Shawn Brimley is the Executive Vice President and Director of Studies at the Center for a New American Security. Mr. Brimley served in the Pentagon as Special Advisor to the Under Secretary of Defense for Policy and at the White House as Director for Strategic Planning on the National Security Council staff.

Loren DeJonge Schulman is the Deputy Director of Studies and Leon E. Panetta Senior Fellow at the Center for a New American Security. Ms. Schulman left the White House in 2014 after serving as Senior Advisor to National Security Advisor Susan Rice. She has also worked as Chief of Staff to the Assistant Secretary of Defense for International Security Affairs, Director for Defense Policy and Strategy on the National Security Council Staff, and as a special assistant to Secretary of Defense Robert Gates.